They didn't earn $544M, they had $544M in revenue. They lost $124M but it's all due to their decisions. They have a great operating margin in the 60s and spent all the money elsewhere.
Revenue is how much you sold stuff for. Profit is how much did you make after paying for everything to run your business. They got $544M but spent $668M, so they didn't make a profit.
Well after their pay-per-download debacle, their latest quarter's earnings may not be indicative of the shit that is coming down on them. There are dark clouds on the horizon for Unity.
The best programmers there probably see the writing on the wall. The best small game dev studios will also.
I think unity is going to see a big quality drop even if it manages to get out of this death spiral.
And I'm still curious if they'll get targeted by regulators for the anti-competitive shit that started this (the whole thing was intended to strong arm developers into using their ad platform to get an exemption from the new pricing model and put a rival ad platform out of business).
I work at Unity. The brain drain is for real. It started 2 layoffs ago and is picking up speed. My department lost some really valuable workers, because layoffs are imminent they don't let leads hire many replacements, and the resulting critical work gets dropped on people already doing full work loads. Some of the people my department has lost helped build core systems from scratch years ago so that intimate knowledge of those systems is just gone.
Exactly. The colossal lost of trust is not easy to regain (if it can ever be regained at all) and that's will be a specter haunting Unity's economic performance for the years to come. I've seen so much outpouring of support for Godot and other open source / free game engines, and really hope that support continues.
We are dependent on the success of our customers in the gaming market. Adverse events relating to our customers or their games could have a negative impact on our business
Remind me, why did you alienate your customer base with a per install fee Unity?
Headline really feels like it's trying to imply unity is currently making a profit. They haven't been out of the red in a while. Businesses tend to die when they're bleeding money and there's no VC.
It's a bit more complicated than that. There are a lot of accounting tricks to be constantly making losses but end up cash flow positive.
I don't work or invest in Unity so I don't have a great understanding of their metrics but companies I worked at would constantly capitalize new projects to add expenses in the future. You can structure sales deals so a new feature is added late in the contract. That pushes revenue out, but you can collect more cash early.
If unity didn't do share buy backs this quarter, they would have a positive cash flow. Which points to they should be a profitable company but instead are using accounting tricks to post losses to lower tax bills.
Its insanity, Unity is a good product. There is a place for it in reality. In any sane world this product would have continued to operate how it was and it would have benefited people. But since profits are attached everything will have to be ruined eventually. Unreal is next to bat.
That's really well said and an underrated comment here. In a sane world, Unity would "make a living" just fine. Another user commented on where they spent their margins, and my bet is that it's on bullshit. Executive compensation should be first to get slashed, and if anything they should concentrate on keeping the "golden goose" or core development team alive.
Allowing leaders to use profits however they wish has been a disaster. I don't know if it was codified into law, but when companies had to invest in R&D, and they had to invest in employees before drinking their own koolaid the world was a better place. Employees were taken care of, average people could thrive. Now its an open feeding trough everyone else is exempt from. The modern world only thrives with checks and balances, its proven that without them the powerful cannot be trusted.
It's because they keep buying random companies. Then weirdly there's those random companies don't make them any money, and so the obvious illusion is to buy some more random companies.